North Carolina has seen a spike in insurance fraud since the COVID-19 pandemic, according to North Carolina Insurance Commissioner Mike Causey, who spoke about the issue at Tuesday’s Council of State meeting.
The commissioner said one of the worst forms of fraud has been online scams targeting senior citizens.
“You have some pretty clever and crafty people out there that are convincing our seniors to take money out of annuities or out of savings accounts and put them into other types of annuities or savings accounts that are promising high returns,” Causey said. “But they’re pretty shoddy products, and they’re scams, and many times when these seniors find out that they become a victim of a scam, they don’t want to report it. They don’t want their family to know because they’re too embarrassed to talk about it. So, we’re finding out after that person dies and their family finds out about it.”
One particular scam Causey described is happening in the Piedmont area of the state, involving people going door to door posing as Department of Insurance employees trying to sell insurance policies when the department doesn’t sell insurance.
There are also online medical scams as well, including medical doctors in other states writing prescriptions for North Carolina residents and sending them to “unscrupulous” pharmacists in North Carolina. Causey said most people don’t bother to look at their explanation of benefits, but most of these are listed within that document.
He also mentioned accidents that are being staged for insurance money.
“We had one person here in North Carolina taking pictures off the internet of a wrecked vehicle,” Causey said. “So this woman submitted the same picture to more than 20 insurance companies, and only two of those companies found anything suspicious and reported it to us and got our investigators looking into it. But we’re all paying for this fraud.”
According to the Coalition Against Insurance Fraud, he said, Americans are paying over $300 billion a year just to cover the known costs, or, for every dollar spent on any type of insurance, about 20 cents is going to pay for fraud. Causey then emphasized the department has a fraud hotline—888-680-7684—for anyone who suspects insurance fraud.
Secretary of State Elaine Marshall reported a record number of annual reports, 572,211, have been processed so far this year, an increase of more than 2,000 from 2023. Reports in total have increased 55% over the past five years. She said her department anticipates that between 170,000 and 175,000 — or between 650 and 700 a day — new businesses will be created by the end of the year.
Attorney General Josh Stein said the North Carolina Department of Justice has requested funding from the General Assembly for three major areas. One is a cold case unit to expedite investigations of cold cases now that the backlog of untested rape kits has been eliminated. He said 2000 profiles have been uploaded to the state’s database, and law enforcement has made over 100 arrests as a result.
In addition, the NCDOJ requested approval for a fentanyl control unit within their special prosecution section. The new unit would help local DAs with time-consuming and very complex cases having to do with drug trafficking and fentanyl.
“It’s the deadliest drug epidemic America has ever experienced, and in North Carolina on average, we’re going to lose 12 lives today to an overdose, and that means we lost 12 yesterday, and we’re gonna lose 12 more tomorrow, and nine of those people have a synthetic opioid like fentanyl in their system,” Stein said. “So, we want to raise the cost of doing business for these drug traffickers who are making millions peddling poisons in our community, and a special prosecutions unit of federal prosecutors can do the trick.”
The third request Stein outlined is to add more police officers across the state, pointing out that chiefs and sheriffs are struggling to fill widespread vacancies.
“There is a recruitment and retention package that has been developed in consultation with state prosecutors, state law enforcement, including the Department of Public Safety, the governor and then the chiefs of police and the sheriffs and our office that can help local law enforcement address some of these gaps and we’re calling on the legislature to fund all three of those efforts in budget negotiations,” he added.
State Treasurer Dale Folwell stressed that the State Health Plan is in trouble and that he may have to request emergency funding, the details of which will be covered in an upcoming Carolina Journal article.
He also paid tribute to the four fallen officers who died in an ambush in Charlotte last month, including William Alden Elliott, a US Marshall. Folwell read a tribute from Elliott’s 12-year-old son, Theo, to his father, which was also published in Elliott’s obituary.
Gov. Roy Cooper closed out the meeting remembering the fallen officers.